The Office for National Statistics (ONS) said sales volumes were 4.3 per cent higher in January when compared with a year earlier, although the figure was 1.5 per cent lower against the previous month following a bumper Christmas.
Household goods stores are leading the sales revival among Britain’s retailers, with volumes up by 9.8 per cent in the best monthly performance since 2007.
Economists said the underlying picture for the retail sector was positive, particularly given the impact of wet weather in the month.
ING Bank economist James Knightley said: “With consumer confidence on a strong upward path, employment rising and wage growth starting to show some hints of life, we look for the household sector to contribute strongly to GDP growth this year.”
With store price inflation growth slowing to 0.2 per cent – the lowest level since September 2009 – the amount spent in January increased by 4.4 per cent compared with a snow-hit month a year earlier.
The month-on-month decline in sales volumes comes after a surprisingly strong performance in December, when the figure jumped 2.5 per cent. However, January’s level of sales was still 0.2 per cent above the average for the final quarter of 2013.
Samuel Tombs, UK economist at Capital Economics, added: “The consumer spending recovery still has some underlying momentum. And looking ahead, sales should be boosted by continued strong growth in employment, rising confidence and the gradual easing of the squeeze on real pay.”